Over 80% of small businesses in Nigeria have been reported to shut down operations before their fifth year anniversary due to harsh economic policies.
Like not being able to withdraw payments from Payment platforms to their bank account.
This was recently revealed via a report titled Perception Study: ‘Efficiency and Impact of Regulatory Activities of Standard Organisation of Nigeria on SMEs’.
The report highlighted why some Small and Medium Enterprises (SMEs) failed to continue operations after their fifth anniversary due to numerous negative operational factors currently influencing Nigeria’s economic climate.
These policies have created some unfavourable and risky business climates which do not favour foreign investments and investors operating in the country.
Some of the factors responsible for the ugly trend have been identified as multiple taxations, the cost of accessing relevant technologies, the absence of research and development facilities, and the increased preference for foreign goods over locally produced products.
These and more have been noticed to affect the growth and longevity of micro-businesses in Nigeria.
The report also revealed its position has been confirmed by the Manufacturing Association of Nigeria, MAN.
The report read in part, “MAN has spoken out loudly that the Nigerian business environment is now under the oppressive weight of several taxes, which have the potential to bankrupt companies.
In the survey, MAN discovered that only 39 of the 119 taxes and levies that were authorised under the taxes and levies (Approved list of collection) Act 1998 were really being levied by various levels of government across the three states.
“80 per cent of SMEs fail before their fifth anniversary due to harsh economic environments, lack of access to capital, and poor business practices, which have stunted the growth and transition of micro-businesses, according to the Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN).”
The report further described Nigeria’s business environment as having a lot of obstacles that mitigate against the successes of SMEs despite government’s economic policies which create the possibility for economic prospects and expansion.